The better question may be why the city's consultant since Aug. 1, 2015 did NOT discover this issue sooner?
The Shreveport city council was briefed on Oct. 13 by a representative of Gallagher Benefit Services, Inc. on the city's contribution to the self-funded heath insurance plan for city workers.
The news was not good.
The city had overpaid its portion to the tune of approximately $3.2 million per year since 2011.
The representative's briefing was an overly long presentation highlighted by countless hand gestures and hair flips.
Little explanation was provided as to why Gallagher had just recently realized this mistake.
Gallagher's contract with the city is to "provide employee benefits management consulting serves to the city.'' The compensation is $5 per employee per month.
The bottomline is that city employees, through no fault of their own, have enjoyed a substantial subsidy on the 70-30 split of premium dollars.
Now the city and its employees are in an uncomfortable dilemma of balancing the true costs of the plan. This means the city will continue to pay more than the required 70 percent and/or city employee premiums substantially increase.
This is another major problem that the current administration and council inherited.
Add this to the funding challenges that keep popping up.
The council budget hearings which begin tomorrow (Friday) at 3 p.m. and continue Sat. will not be a fun exercise.
More stark economic realities can be expected.
John came to Shreveport in January of 1977 when he was transferred to Barksdale AFB.
He’s been active in Shreveport politics since deciding to make Shreveport his home.
John practiced law for 40 years and he now monitors local politics. He regularly attends Shreveport City Council and Caddo Parish Commission meetings.
John is published weekly in The Inquisitor, bi-monthly in The Forum News, and frequently in the Shreveport Times.
He enjoys addressing civic groups on local government issues and elections.